Economic challenges take center stage at Open Classroom

Pres­i­dent Obama and Repub­lican chal­lenger Mitt Romney are rarely in the same place, either phys­i­cally or polit­i­cally. But on Wednesday, eco­nomic experts who have advised both men shared the stage to dis­cuss the fal­tering global economy and the role of fed­eral policy in addressing the crisis.

“At just about any point since the Second World War, the ques­tion was always quite clear and you knew what the prob­lems was,” said former Har­vard Uni­ver­sity pres­i­dent Larry Sum­mers, an econ­o­mist who headed the U.S. Trea­sury from 1999 to 2001 under Pres­i­dent Bill Clinton and served as eco­nomic adviser for Pres­i­dent Obama until 2010. “What stands out at this moment is that you can listen to a dis­cus­sion of some­thing like the deficit and there are two major cross-​​cutting themes.”

Sum­mers and Romney’s eco­nomic adviser, Greg Mankiw, the former chair of Pres­i­dent George W. Bush’s Council of Eco­nomic Advisers, dis­cussed the economy on Wednesday evening as part of the Open Class­room series spon­sored by the School of Public Policy and Urban Affairs. The lec­ture series — The 2012 Elec­tion: Policy Advice to the Pres­i­dent — will be held every Wednesday from 6 to 8 p.m. in 20 West Vil­lage F throughout the semester and is open to the public.

Speaking to hun­dreds of atten­dees, Mankiw described the 2008 par­tisan debate over how to address the eco­nomic crisis. “The big ques­tion that plagued both par­ties was whether to stim­u­late the economy by cut­ting taxes or increasing spending,” he said.

Obama’s approach focused on gov­ern­ment spending, Mankiw explained, while Repub­li­cans argued for tax cuts. The Repub­lican approach, he said, would leave cit­i­zens with more money to spend, bol­stering the economy from within.

Sum­mers, on the other hand, argued that it’s more impor­tant for the gov­ern­ment to spend money than address the deficit over the short term because the pri­vate sector has been “some com­bi­na­tion of unwilling and unable to spend and lend.”

Gov­ern­ment spending, he added, is the only way to stim­u­late enough demand to address the chal­lenges of “a deeply depressed stuck economy.”

Greg Mankiw.

Mankiw and Sum­mers agreed that a solu­tion rooted entirely in either spending or in tax cuts would be nei­ther ben­e­fi­cial nor sus­tain­able. Any attempt to address the nation’s eco­nomic woes, they said, must be multifaceted.

Mankiw explained that fiscal policy should aim to “broaden the base and lower rates,” a stan­dard con­ser­v­a­tive approach. But he also advo­cated for raising the retire­ment age, which he said would reduce the burden on enti­tle­ment pro­grams such as Social Secu­rity and Medicare.

“That’s some­thing that polls much better among econ­o­mists than the gen­eral public,” joked Mankiw. Ear­lier in the evening, he noted that while he is a Romney adviser, “at times I think it will be clear that I’m expressing an opinion that only a tenured pro­fessor could.”

He said it was a priv­i­lege to have both Mankiw and Sum­mers on campus. “It’s a great oppor­tu­nity to have both these men address what is clearly the most impor­tant issue of the cam­paigns,” Dukakis said.

Sum­mers advised his 1988 pres­i­den­tial cam­paign, Dukakis noted, but then joked, “He was a very good eco­nomic adviser — that’s not why I lost.”

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